The company is facing a class action lawsuit following a stock price drop triggered by the delayed disclosure of a December data breach.
Coinbase finds itself at the center of a legal storm after being hit with a class action lawsuit filed by shareholders. The lawsuit stems from a decline in the company’s stock price, which occurred after the belated communication of a cybersecurity incident.
The class action, filed in the United States District Court for the Eastern District of Pennsylvania, names investor Brady Nessler as the lead plaintiff. The suit claims that the platform’s shareholders suffered “substantial losses and damages” due to the company’s alleged failure to disclose material information.
Investors accuse the company of not promptly revealing crucial details that could have influenced investment decisions. Among the main allegations is the failure to immediately communicate a data breach that took place last December.
Details of the breach
On May 15, Coinbase publicly disclosed the news of a cyberattack that occurred last December. The incident involved cybercriminals who managed to corrupt several company employees, gaining unauthorized access to customer personal data.
The delayed disclosure of the data breach triggered an immediate stock market reaction. Coinbase shares fell 7.2%, closing the day at $244.
The exchange estimated that the financial impact of the data breach could range between $180 million and $400 million. These costs would cover both expenses to restore security systems and potential reimbursements to customers affected by the incident.
The lawsuit highlights that the company should have communicated these estimated costs to investors more promptly, allowing them to make informed decisions about their investments.
Additional allegations in the lawsuit
In addition to the data breach, the lawsuit lists a series of other alleged communication failures by the company. Among them is the non-disclosure of a violation by CB Payments — Coinbase’s UK subsidiary — of a 2020 agreement with the UK’s Financial Conduct Authority.
The class action covers all investors who acquired company shares between April 14, 2021, and May 14, 2025 — a period during which the allegedly omitted information is believed to have negatively affected the stock price.
The legal action doesn’t target the company alone but also names top executives including CEO Brian Armstrong and CFO Alesia Haas among the defendants.
